Oslo Børs: Weakest ever start to the year for Norway’s stock market

The Benchmark Index has risen rapidly during the last couple of weeks. From the bottom seen on 16 March, it has climbed 16.8%, with an overall decrease of 14.8% being recorded for the month of March.

Since the start of 2020, the Benchmark Index has fallen 24.1%. There have only been five quarters with bigger decreases: two in 2008, as well as one each in 1987, 1998 and 2002.

• In 1987 the biggest market rally since the First World War ended abruptly. The crash on Wall Street caused the Total Index to fall 19.1% on Tuesday 20 October, which subsequently came to be called Black Tuesday. The Total Index fell 41% over the course of the fourth quarter of 1987.
• In 1998 the oil and financial crisis in Asia caused the Benchmark Index to fall 33.3% over the course of the third quarter. Share prices had been rising steadily through the 90s. The price of oil fell sharply in the wake of the 1997/1998 Asian financial crisis.
• During the 2008 financial crisis, the Benchmark Index fell 31.3% over the third quarter and then 29.2% in the fourth quarter. A steep drop in the price of oil compounded the drop in share prices at Oslo Børs. In addition, foreign investors sought refuge in larger markets. In the preceding years non-Norwegian investors had increased their ownership of companies listed on Oslo Børs to record levels, and foreign investors had been crucial for liquidity. With a drop over the course of the year of 54.1%, 2008 was the weakest year in the history of the Benchmark Index.
• In 2002, accounting scandals at companies such as Enron and Arthur Andersen came on top of the dotcom crash and the fallout from the September 11 attacks the year before. The Benchmark Index fell 25.5% in the third quarter of 2002.

A number of other quarters have seen decreases nearly as big as that recorded in the first quarter of 2020 – see the table below:

• The third quarter of 2001: The September 11 attacks in the USA.
• The third quarter of 1974: The oil price shock following the Yom Kippur War accelerated the international economic downturn.
• The fourth quarter of 1918: The armistice of 11 November 1918 had an immediate and strong negative impact on the shares of shipping companies.
• The third quarter of 1992: The banking crisis in the wake of the economic expansion of the 80s.
• The third quarter of 2011: The sovereign debt crisis that affected a number of European countries threatened the euro and caused stock markets to fall.

The index from 1914 until today is a composite index put together from a number of historic indices. The Benchmark Index has been used for the period from 1996. For the period between 1983 and 1996, the Total Index has been used. Both of these indices are total return indices, meaning that they include dividend payments. For the period before 1983, various share price indices have been used, which means only share price performance is measured. For some periods, e.g. during World War I, very high dividends were paid. Norges Bank (Jan Tore Klovland, Historical stock price indices in Norway 1914– 2003) has put the index together for the period before 1983 using a range of sources, including from Statistics Norway.

• Chart: Share prices since 1914